Question

Under SEC rules, the managers of certain funds are allowed to deduct charges for advertising, brokerage commissions, and other sales expenses directly from the fund assets rather than billing investors. These fees are known as ____________. back-end loads front-end loads 12b-1 charges direct operating expenses

Answer 1

Answer:

These kind of fees that are deducted for advertising and other sales expenses directly from the fund rather than billing investors is known as 12 B-1 charges.

Explanation:

This is a fee assessed from a mutual fund to it's investors. The managers instead of charging or billing the investors, deduct certain amount directly  from the fund itself. This is a type of annual marketing and distribution fee considered as operational expense and is included in a fund's expense ratio.